A little bit of talk talk can go a long long way, as the markets illustrated rather nicely yesterday. The rumour mill clanked into gear when dealers began to chatter about Carphone Warehouse – gossiping about a statement on Friday that would unveil demerger details or at least a deal to acquire Tiscali’s UK broadband business – and up went both the volume of Carphone trades and the share price, ending the day 18¾p higher at 299¼p.

Last Friday’s deadline for bids for Tiscali was delayed without a definite timetable and Carphone is the most likely acquirer of the business, even though sources close to the company played down any imminent deal.

The purchase would transform Carphone’s TalkTalk brand into the No 1 UK broadband operation. It might also add pressure on Charles Dunstone, the founder, to demerge TalkTalk from the mobile phone shops and allow Best Buy, of the United States, to take control of the latter. Today Mr Dunstone is expected to report a £1 billion investment from Best Buy. It will involve putting Carphone Warehouse’s retail distribution business into a new joint venture, with Best Buy acquiring a 50 per cent stake in exchange for its £1 billion injection.

It was a day when short-sellers were comprehensively squeezed, the FTSE 100 closing up 45.8 points at 6,261.0. Enterprise Inns led the way, up 115p, 29 per cent, to 510p as it confirmed that it had gained approval from HM Revenue & Customs for a tax-efficient real estate investment trust vehicle. The market thought that this was clearly the right (Reit?) move and the news lifted the entire pub sector, Marston’s being the biggest beneficiary, up 34½p to 234p.

A profit warning from Nedbank, of South Africa, hit its majority owner Old Mutual, dragging it down 4.8p to 126.2p. The bank, the country’s fourth-largest, said that growth in the first half of the year would be below its budgeted levels, hit by the weakening economy, high levels of “credit stress” and market volatility. Old Mutual was also depressed by going ex-dividend.

A combination of falling copper prices, helped by the end of a strike at Codelco, the Chilean miner, and going ex-dividend made Antofagasta, Codelco’s domestic rival, the worst performer, down 34½p to 767½p. Rexam was also down, 15¾p to 464p as, from yesterday, investors were no longer entitled to the dividend.

Goldman Sachs kept its “buy” rating on HBOS, despite its £4 billion rights issue and the bank rose 19½p to 519½p.

Wolseley, the builder’s merchant, was up 33½p to 572p and Persimmon, the housebuilder, gained 32p to 620½p. Redrow was up 18p at 289¾p.

Results that were stronger than expected from BAT helped the tobacco group to gain 56p to close at £19.94.

Rank was the biggest mid-sized casualty, down 5¼p to 89p, after it said that the smoking ban was hurting revenues. Yell, however, soared 13½p to 189¼p after Idearc, its American rival, revealed better-than-expected first-quarter profits.

New York: Wall Street tumbled as the price of a barrel of oil soared to a record near $124 and sparked concerns that the stock market’s recent gains might have been premature. At the close, the Dow Jones industrial average was down 206.50 points at 12,814.30.

Explore Markets

• United States

• Europe

• Japan

• China

• Russia

• The Gulf

• India

• Africa

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive